Svend Hollensen GLOBAL MARKETING 5Th Edition

Svend Hollensen GLOBAL MARKETING 5th Edition

Introduction Part IV and Chapter 14 Product decisions Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.2

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.3

Figure IV.1 Environmental factors influencing the balance between standardization and adaptation

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.4

Figure IV.2 Standardization and adaptation of the international marketing mix

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Figure IV.3 Analysis of a company’s standardization potential Source: adapted from Kreutzer (1988). Reproduced with kind permission from Emerald Group Publishing Ltd; www.emeraldinsight.com.

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.6

Source: Hollensen, S. (2008) Essentials of Global Marketing, FT/Prentice Hall, p. 299, Table 1

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Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.8 Learning objectives (1)

 Discuss the influences that lead a firm to standardize or adapt its products  Explore how international service strategies are developed  Distinguish between the product life cycle and the international product life cycle  Discuss the challenge of developing new products for foreign markets

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.9 Learning objectives (2)

 Explain and illustrate the alternatives in the product communication mix  Define and explain the different branding alternatives  Discuss brand piracy and the possible anti- counterfeiting strategies  Explain what is meant by a ‘green’ product  Discuss alternative environmental management strategies

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.10

Low Delivery, installation, guarantees, Support after-sales service, services spare parts Ability to standardize Product brand, quality, design, packaging, price, product attributes country of origin, staff behaviour, size elements

Core product functional features, performance, benefits perceived value, image, technology High

Figure 14.1 The three levels of a product

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.11

Figure 14.2 Scale of elemental dominance Source: Czinkota and Ronkainen (1995, p. 526)

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.12 Characteristics of services

Intangibility

Perishability

Heterogeneity

Inseparability

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.13 Three categories of service

Information- People Possession based processing processing services

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.14

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.15 Categories of supplementary service

 Information  Safekeeping  Consultation/advice  Exceptions  Order taking  Billing  Hospitality  Payment

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.16 Differences in the B2B market (versus consumer markets)

 Fewer and larger buyers  Derived, fluctuating and relatively inelastic demand  Many participants in buying process  Professional buyers  Closer relationships  Absence of intermediaries  Technological links

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.17 What is this?

The _____ states products or brands follow a sequence of stages including introduction, growth, maturity and sales decline.

Product life cycle

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Figure 14.3 The PLC and time to market Source: Hollensen, S. (2010) Marketing Management, 2nd edition, FT/Prentice Hall, Fig. 11.7

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Figure 14.4 The product life cycle and its strategic marketing implications Source: Hollensen, S. (2010) Marketing Management, 2nd edition, FT/Prentice Hall, Fig. 7.5

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Figure 14.5 The product life cycle

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Figure 14.6 Comparisons of PLCs for product forms (technological life cycles, TLCs) and a single product model: example with different VCR systems Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.22

Figure 14.7 Situation of British Leyland in the late 1970s Source: partly reprinted from Long Range Planning, 17(3), McNamee, P. (1984) ‘Competitive analysis using matrix displays’, pp. 98–114, copyright 1984, with permission from Elsevier

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.23 International product life cycles

 Describes diffusion of an innovation across national boundaries  Demand grows first in innovating country and is then exported  Eventually demand grows in LDCs

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.24

Figure 14.8 IPLC curves Source: Onkvisit and Shaw (1993, p. 483)

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Figure 14.9 PLCs of different countries for a specific product

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.26 Japanese manufacturers compete on time-to-market

 Early integration of customers and suppliers  Multiskilled project teams  Interlinking of R&D, production and marketing  Total quality management  Parallel planning of new products and required production facilities  Outsourcing

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Figure 14.10 Compression of R&D cycles and product life cycles Source: reprinted from Long Range Planning, 28(2), Töpfer, A. (1995) ‘New products: cutting the time to market’, p. 64, Copyright 1995, with permission from Elsevier

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Figure 14.11 Development and test periods for suppliers to the car industry Source: reprinted from Long Range Planning, 28(2), Töpfer, A. (1995) ‘New products: cutting the time to market’, p. 72, Copyright 1995, with permission from Elsevier

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New to Increasing High International risk markets New to The home Reposition country Newness Existing to products International Market New to the company Line Cost extensions/ reductions Low improvements

Low Newness to Company High

Figure 14.12 Different degrees of product newness

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.30

Product

Standard Adapt New

Straight Product Standard extension adaptation Product Promotion invention Promotion Dual Adapt adaptation adaptation

Figure 14.13 Product/communication mode Source: based on Keegan (1995), pp. 489–94, p. 498, Table 13–1

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.31 ‘Organics’ ‘straight extension’ to Argentina (only language is adapted)

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.32 Kellogg’s dual adaption for Indian market

http://www.kelloggcompany.com

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.33 ‘Promotion Adaptation’ of Lux Soap: UK – India

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‘Product Invention’ for India

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.35 What is this?

Which term refers to the effect on quality perceptions caused by knowledge of the production country location for the product?

Country-of-origin effects

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.36

Source: adapted from Fan (2007). From Hollensen, S. (2008) Essentials of Global Marketing, FT/Prentice Hall, p. 311, Exhibit 11.1.

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.37 What is this?

Which term refers to the premium a customer would pay for the branded product compared to an identical unbranded version of the same product?

Brand equity

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.38 Brand equity’s assets and liabilities

Brand loyalty

Brand awareness

Perceived quality

Brand associations

Other proprietary brand assets

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.39 The functions of branding

 To distinguish a company’s offering and differentiate one particular product from its competitors  To create identification and brand awareness  To guarantee a certain level of quality and satisfaction  To help with promotion of the product

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Figure 14.14 Branding decisions Source: adapted from Onkvisit and Shaw (1993, p. 534)

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Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.44

Source: adapted from Onkvisit and Shaw (1989). Published with permission from Emerald Publishing Ltd. www.emeraldinsight.com

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Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.46

Private branding 100% externalizing

Co-branding Brand alliance

Manufacturer’s 100% internalizing brand

Figure 14.15 The three brand options

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.47 What is this?

Which term refers to a retailer’s own brand (like Marks & Spencer’s)?

Private label

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.48 Perspectives on private labels

Retailer perspective Manufacturer perspective  Better profit margins  No promotional expenses  Strengthens retailer  Provides access to shelf image space  Requires competing on price  Loss of control  May cannibalize other manufacturer brands

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.49

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.50 What is this?

_____ describes a form of cooperation between two or more brands, which can create synergies that are valuable for both participants, above the value they would expect to generate on their own.

Co-branding

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Figure 14.16 Illustration of co-branding and ingredient branding

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Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.53 What is this?

_____ branding involves sight, sound, smell, touch and taste.

Sensory

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.54 What is this?

When a famous person uses his or her status in society to promote a product, it is called _____.

Celebrity branding

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.56 Determinants of value of celebrity licence

Celebrity Q score

Product being promoted

Quality of licensed product

Amount of design control

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.57 Steps involved with international celebrity licensing

 Identify the rights involved  Negotiate the terms and scope of the licence  Determine the payment and other terms of the licence

Modularity

Intelligence

Organization

http://www.ducati.com

Figure 14.17 Product innovation through the Internet

Figure 14.18 Long tail theory: online channels will fatten the long tail

What term refers to the integration of business practices and products that are friendly to the environment while also meeting the needs of the consumers?

Green marketing

Value creation approach Benefit Cost reduction enhancement

Green product Pollution prevention Proactive innovation Beyond compliance Change orientation Accommo- Green product Pollution prevention dative differentiation Compliance

Figure 14.19 Types of environmental strategic posture Source: adapted from Starik et al. (1996, p. 17)

Figure 14.20 Value-adding logistics and the environmental interface Source: adapted from Wu and Dunn (1995, p. 23) with permission from International Journal of Physical Distribution and Logistics Management, Emerald Group Publishing Ltd.

Hollensen: Global Marketing, 5th Edition, © Pearson Education Limited 2011 Slide 14.66 Benefits of strategic alliances with environmental groups

 Increased consumer confidence in green products and claims  Access to environmental information  Marketer access to new markets  Positive publicity and reduction of criticism  Education for consumers about key environmental issues

(a) Product Information

(b) TV advertising information (c) print advertising information (d) point-of-sale equipment (e) packaging system Arla foods

How would you distinguish between services and products? What are the main implications of this difference for the global marketing of services? What implications does the product life cycle theory have for international product development strategy?

 To what degree should international markets be offered standardized service and warranty policies that do not differ significantly from market to market?  Why is the international product policy likely to be given higher priority in most firms than other elements of the global marketing mix?  Describe briefly the IPLC theory and its marketing implications.

 What are the requirements that must be met so that a commodity can effectively be transformed into a branded product?  Discuss the factors that need to be taken into account when making packaging decisions for international product lines.  When is it appropriate to use multiple brands in (a) a single market and (b) several markets Countnies?

 What is the importance of ‘country of origin’ in international product marketing?  What are the distinguishing characteristics of services? Explain why these characteristics make it difficult to sell services in foreign markets.  Identify the major barriers to developing international brands.

 Discuss the decision to add or drop products to or from the product line in international markets.  Why should customer-service levels differ internationally? Is it, for example, ethical to offer a lower customer-service level in developing countries than in industrialized countries?  What are the characteristics of a good international brand name?